PETALING JAYA: LBS Bina Group Bhd
is positioning itself for a recovery built on a leaner portfolio, stronger Klang Valley focus and disciplined capital management, even as it navigates a cautious property market.
Mercury Securities said, in a note to clients yesterday, it is remaining positive on LBS’ 8×8 Strategy, which focuses on efficient land utilisation, continued township expansion, and a diversified product mix spanning residential, commercial/retail, industrial, and hospitality segments.
The research house added that LBS’ near-term performance is expected to be supported by upcoming launches, with combined gross development value (GDV) of RM1.02bil, while a 3,778-acre land bank translating into RM33bil of GDV underpins long-term visibility.
On the other hand, the company is also in the midst of recalibration, with a highlight in November being the disposal of two Johor plots for RM110mil, a move LBS viewed as freeing up resources for its core Klang Valley market.
This is especially timely with the newly secured Kwasa Land in Damansara, estimated to carry RM8.3bil in GDV, with the proposed PJ West township being rolled out over 14 years and spanning a broad residential mix.
LBS holds 3.5 acres in Johor and is in talks to monetise it next year, with management confident pricing should be “broadly comparable” despite the remaining land being leasehold.
However, Mercury Securities pointed out that LBS’s earnings were distorted in the third quarter ended September by a technical drag, as the cost of sales margin spiked after a one-off RM34mil accounting adjustment tied to future works at Kita @ Cybersouth, following a change from serviced apartments to commercial shops.
LBS stressed this was non-recurring, tied to the reallocation of infrastructure costs.
Operationally, Mercury Securities noted that LBS’s launches in 2025 have been paced against sentiment.
As of late November, only RM958mil of projects had been rolled out compared with an internal RM2.3bil guide, as the group deferred some launches to 2026 amid sales and service tax (SST) uncertainty, particularly for serviced apartments.
“We view the SST impact, if any, as manageable as it only reduces net margins by a lower single digit of 3%. LBS is now reviewing the selling price per unit, cost structure and design optimisation,” it said.
The indicative pipeline for the financial year ending 2026 is around RM2.6bil.
Meanwhile, the Mercury Securities said LBS’s RM93mil perpetual sukuk which is due in March 2026 would be redeemed, and there is “no plan so far to issue a new perpetual sukuk,” reinforcing management’s conservative stance on leverage.
